Capital One Shopping hit with class action suit over alleged Honey-like practices

When we spoke to LegalEagle last month about the class action lawsuit he filed against Honey on behalf of all content creators, he mentioned a handful of other coupon-finding browser extensions that appeared to operate similarly. They too would (allegedly) snatch commissions by replacing content creators’ affiliate links with their own at the very last second before checkout.

Now, one of the extensions he mentioned, Capital One Shopping, is officially facing its own class action suit.

Filed Jan. 23 in the United States District Court for the Eastern District of Virginia, the suit alleges that Capital One Shopping (owned, of course, by credit card company Capital One) “uses its approximately 10 million unwitting subscribers to perpetrate a huge scam against Creators.”

“Defendants advertise Capital One as an extension that promotes savings and convenience to consumers by ‘instantly searching for and testing coupon codes or searching retailers for better prices,'” the suit claims. “However, what Defendants do not tell consumer is that alongside scraping the internet for coupons, Capital One Shopping also acts to steal commissions from Creators by replacing the Creators’ information with Capital One Shopping’s in cookies that are used to track and attribute commissions just as consumers are about to complete their purchases.”

YouTubers Edgar Oganesyan (who runs TechSource, which has 3.8 million subscribers) and Matthew Ely (who runs Toasty Bros, with 750K subscribers) are the principal plaintiffs in the case. They both allege their revenue from affiliate earnings has declined “despite increased viewership and engagement.”

“Capital One’s actions are a blatant exploitation of content creators’ hard work, diverting their rightful earnings through deceptive practices,” Daniel Schwartz, a partner at DiCello Levitt who filed the suit, said. “We are committed to ensuring Mr. Oganesyan, Mr. Ely, and other affected Creators receive the compensation they deserve.”

Fellow filing attorney Douglas J. McNamara, a partner at Cohen Milstein, added that Capital One Shopping’s alleged practices are “pure and simple consumer abuse, but at a nationwide level.”

Like the suit against Honey, this one is seeking financial compensation for all creators who may have been affected. That means, if judgments for both suits land in creators’ favor, some may be getting two (or multiple…) payouts. Those payouts likely won’t replace all the income they may have lost over the past few years, but they’ll be something.

And, as LegalEagle pointed out in our conversation about Honey, these suits might bring attention to the structure of the affiliate marketing industry and the fairness of how creators are compensated and credited for sales. If Honey, Capital One Shopping, and other coupon-finding browser extensions have been replacing creators’ affiliate links with their own, that would not only take income from creators, but traffic, giving brands a lowball impression of how much purchase-driving power creators have.

Consider this scenario: A creator partners with an energy drink brand and 15 of their subscribers follow their affiliate link to buy a case. Seven of those people use a coupon-finding browser extension and (allegedly) end up with the creator’s affiliate attribution erased. To the partnering brand, it looks like the creator only sold a product to eight people–around half of their actual sales power. That brand might go on to invest less in creator marketing.

And, if this happened to enough brands with enough creators, it had an industry-wide impact on data about creator sales efficacy. Brands and marketing agencies simply cannot know how well creators have been selling their products.

Other extensions LegalEagle cited as potential targets for creator-protecting class action suits include Karma and Pie, which was founded last year by Honey co-founder Ryan Hudson. For now, though, creators should keep an eye on the suits against Honey and Capital One Shopping, and be prepared to throw their names in for class action payouts if applicable.